Bank account holders will soon be able to use the Unified Payments Interface (UPI) technology to make cardless withdrawals from any ATM. While some banks currently offer cardless withdrawals, the RBI's regulation requires them to provide cardless withdrawal operations for clients of other banks as well.
"At the moment, cardless cash withdrawal through ATMs is only available from a few banks." "It is now recommended to make cardless cash withdrawals available across all banks and ATM networks via the UPI," stated RBI Governor Shaktikanta Das. He went on to say that, in addition to making transactions easier, the lack of a physical card for such transactions will also prevent frauds such as card skimming and cloning.
Das noted that this does not imply that banks would cease issuing debit cards that may be used for offline or foreign purchases. "This change will be well received by young people, who utilize their phones to make all digital payments utilizing UPI rather than a debit card." They may now withdraw cash via UPI as well.
Because it is contactless, it will improve convenience, and customers may expect a significantly different transaction experience in the future. With individuals increasingly choosing contactless payments, ATM cardless withdrawals would be a significant boost to contactless payments," said Mandar Agashe, founder of Sarvatra Technologies, a UPI technology enabler for cooperative banks.
However, others believe that the shift towards UPI will influence banks' card operations, resulting in greater costs. "At first glance, this step appears to be bad for MDR fee-generating payment form elements." On balance, this measure would minimize the necessity to carry debit cards on one's person, which might have a first-order influence on debit cards. "Because this action appears to encourage the ubiquity of UPI, there might be a possible second-order effect on other payment form factors like credit cards and wallets," said Shivaji Thapliyal, lead analyst for institutional stocks, Yes Securities.
